VOTE AGAINST THE REMOVAL OF GAFISA S BOARD August 2018

Transcription

1 \ VOTE AGAINST THE REMOVAL OF GAFISA S BOARD August 2018

2 Executive summary GAFISA S MANAGEMENT RECOMMENDS ITS SHAREHOLDERS TO VOTE AGAINST THE REMOVAL OF ITS BOARD MEMBERS IN THE EXTRAORDINARY SHAREHOLDERS MEETING TO TAKE PLACE ON SEPTEMBER 25 TH, Strategy adopted by Gafisa s management is producing results, which are already reflected in the last two quarters results published by the Company 2 Gafisa is well positioned to reap the benefits of the recovery in the residential real estate market in Brazil 3 The suggested removal of Gafisa s board members represents a risk to shareholder value generation as well as a potential risk of discontinuity in Gafisa s strategy 4 Gafisa is exploring potential strategic alternatives to maximize the value to all shareholders 2

3 Strategy is producing results

4 Cost discipline: downsizing of G&A of 20% since 2016 G&A Evolution 1 (R$MM) % In real terms Gafisa 2Q18 LTM 2 G&A expenses are ~53% lower than Q18 LTM 2 ¹Considers Gafisa Business Unit from 2013 through 2016 ²Last twelve months ³Calculation assumes G&A expenses adjusted by IPCA from Jan/14 through Jun/18 4

5 Assertiveness in launches: relevant PSV 1 volume and high SoS 2 Net Sales (R$ MM) and SoS 2 34,5% 37,6% 37.5% 43.1% Best LTM 3 SoS 2 since ,7% 29,6% 31,1% 28,9% 26,5% 31,5% 36,8% 32.0% Launches ,1% Q15 2T15 3T15 3Q15 4T15 4Q15 1Q16 1T16 2T16 2Q16 3Q16 3T16 4T16 4Q16 1Q17 1T17 2Q17 2T17 3T17 3Q17 4T17 4Q17 1Q18 1T18 2Q18 2T18 UPSIDE PINHEIROS UPSIDE PARAÍSO BELVEDERE LORIAN MOOV BELÉM Total launches PSV 1 in 1H18 of R$539MM, already reaching the total PSV 1 recorded for 2017 of R$554MM ¹Potential sales value ²Sales over supply ³Last twelve months Net Sales LTM 3 SoS 2 5

6 New reality in cancellations: ~50% lower than 2016/2017 Cancellations (R$MM) Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q avg.: R$128 MM 2016 avg.: R$127 MM 2017 avg.: R$103 MM 2018 avg.: R$58.5 MM 6

7 Reduction in inventories by 21% since the end of 2016 contributing to cash generation Inventory Evolution 4Q16-2Q18 (R$ MM) (R$364 MM) (21%) Reduction in inventories by 21%, even with launches of R$1.1bn and cancellations of R$529 MM in the period Inventories 4Q16 Inventories 2Q Inventory turnover 1 LTM 2 (Months) Best inventory turnover 1 in the last 2 years 2Q16 2T16 3Q16 3T16 4Q16 4T16 1Q17 1T17 2T17 2Q17 3T17 3Q17 4T17 4Q17 1T18 1Q18 2T18 2Q18 1 Turnover calculated as inventory divided by LTM sales divided by 12 ²Last twelve months 7

8 2Q18 results already materialize the strategy Net revenues (R$ MM) Highest net revenues since 4Q Recurring Adjusted EBITDA¹ (R$ MM) Inflection in EBITDA in 2018 demonstrates the higher profitability and cost reduction efforts 3 29 (47) (65) (44) (92) 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Gross profit & Margin (R$ MM & %) 2Q18 presented gross profit almost twice than in the entire ,2% 8,4% 11,7% 1,2% 27,7% 59 34,5% 104 Backlog gross profit & Margin (R$ MM & %) Recovery of backlog gross margin, reaching the highest figure since 4Q16 36,3% ,8% 34,9% 34,8% ,0% 37,5% Q17 2Q17 3Q17 4Q17 1Q18 2Q18 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 ¹Adjusted by expense with stock option plan (non-cash) and minority shareholder. EBITDA does not consider Alphaville s equity income 8

9 Capital increase has rebalanced the capital structure and debt reschedule provided flexibility to the future Net debt & Net debt / Equity (R$ MM & %) Debt amortization schedule (R$ MM & % of total debt) 126,1% 46,6% ,8% Tenda s spin-off 83,1% 82,8% Capital increase¹ ,7% ,7% ,6% 247 0,9% Q18 2Q18 Until Jun/19 Until Jun/20 Until Jun/21 Until Jun/22 The Company ended 2Q18 with R$277 million, or 28.7%, in total debt maturing in the short term, compared to 34.1% at the end of 1Q18 and 48.6% at the end of 3Q17² ¹The Board of Directors, at a meeting held on February 28, 2018, approved the capital increase in the amount of R$ million. 2 Before the debt renegotiation and including FGTS debentures 9

10 Gafisa is well positioned to reap the benefits of the recovery in the residential real estate market in Brazil

11 High-quality landbank well positioned for 3-4 years of launches Landbank 2Q18 (R$ MM) - Region Distribution ,4% ,5% São Paulo Rio de Janeiro 100% of the landbank located in São Paulo and Rio de Janeiro Total of 32 projects / phases, with an average PSV 1 of R$117 MM % Swaps % No Swaps ¹Potential sales value 56.5% of the lands PSV acquired through swaps 11

12 Management guidance Launches ( ) R$ bn / year Gross Margin ( ) 30 35% Cancellations (2018) R$250MM Cancellations (2019) R$150MM 12

13 Current Board of Directors and Executives with an average of 17 years of experience in the residential real estate industry Board of Directors Executive Directors Board member Indication Years of experience Short bio Executive Director Position Years of experience Short bio Odair Senra Indepentend 49 Rodolpho Amboss Guilherme Vilazante Indepentend 34 Indepentend 16 Tomás Awad Indepentend 12 Eric Alencar Indepentend 11 Ana Maria Recart GWI žcivil Engineer, made his entire career at Gafisa, after joining the company in 1970 as an intern Founding partner of Silverpeak Real Estate Partners, a multi-strategy investment platform headquartered in NY Partner at JFL Realty, with prior experience as Equity Research Direct - LATAM at Bank of America Merrill Lynch Current partner and portfolio manager at 3R Investimentos. Also served as partner of LANDIX Real Estate Investments Current CFO of Grupo Oncoclinicas and former CFO / IRO of Cyrela Brazil Realty, a local real estate developer CEO of GWI Empreendimentos Imobiliários, the real estate arm of GWI Sandro Gamba CEO 20 Carlos Calheiros Rodrigo Tarabori Guilherme Carlini Gerson Cohen CFO & IRO 1 Operational Executive Officer Operational Executive Officer Operational Executive Officer Joined the Company in 1995 as an intern. Within the past 5 years served as: (i) Prospection Director, Development Director, Development Managing Director, Construction Managing Director, Sales & Marketing Director and President of Gafisa; Mr. Calheiros built his career in the financial markets holding senior positions at Credit Suisse, Goldman Sachs, HSBC and as Head of the Corporate Sales Desk & Structuring of Banco Votorantim. Joined the Company in 2000 as a Construction Enginner, having served in a variety of positions and most recently as Business Director and Sales & Marketing Director Joined the Company in 2009 as a Prospection Manager, having served most recently a position as Prospection Director and Business Director. Joined Gafisa in 2014 as Controllership Officer, overseeing the controllership, accounting, tax accounting, controls, IT security, partners management, tax and legal planning areas. In 2017, he also assumed responsibility for IT and the Services Center. Karen Guimarães GWI Current legal manager of GWI Real Estate and former litigation lawyer of Cosan and WZ Advogados Luciano do Amaral Operational Executive Officer 16 Joined the Company in 2001 as an intern and has held various positions, including Head of the New Markets Operations New appointments from last Ordinary Shareholders Meeting in Apr/18 13

14 Tenda: value generation case study Management has experience in value accretive transactions for shareholders R$MM Up to 126.2% Sources of value Gafisa s current market cap Value (R$MM) Capital increase in Gafisa in Feb/18 at a premium (200) Spin-off of 50% of Tenda s shares Preemptive right to acquire up to 50% of Tenda s shares Total 1,623 Gafisa shareholders' Gafisa shareholders' 2 value before deal potential current value ¹Assuming Gafisa s investor remained with Tenda s shares received from capital reduction and acquired in pre-emptive rights, and did not participate in Gafisa s capital increase in Feb/18 ²Gafisa s market capitalization as of December 13 th, Gafisa s market capitalization as of August 24 th, Considers shares issued in capital increase in Feb/18 and Gafisa s closing price as of August 24 th, Considers 27 million shares received by Gafisa s shareholders in the spin-off and Tenda s closing price as of August 24 th, Considers 27 million shares potentially acquired by Gafisa s shareholders through pre-emptive rights for R$8.17/share and Tenda s closing price as of August 24 th,

15 Gafisa is exploring strategic alternatives

16 Gafisa is exploring strategic alternatives According to the content of the Material Fact released on August 2, 2018 which may result in the election of all Board Members of the Company by a single group of shareholders, without this concentration in the decision-making power being immediately followed by a benefit for all other shareholders, its Board of Directors authorized that the Company s Management develops potential strategic alternatives, inclusive by means of acquisition of the Company s control by third parties or a business combination, even if such move may also result in the replacement of the entire Board. Thus, the Board of Executive Officers is authorized to engage financial and legal advisors to assist the Company in this process. The Company is looking for alternatives to maximize value for all shareholders 16

17 Conclusion FOR ALL THESE REASONS, GAFISA S MANAGEMENT RECOMMENDS ITS SHAREHOLDERS TO VOTE AGAINST THE REMOVAL OF ITS BOARD MEMBERS IN THE EXTRAORDINARY SHAREHOLDERS MEETING TO TAKE PLACE ON SEPTEMBER 25 TH, Strategy adopted by Gafisa s management is producing results, which are already reflected in the last two quarters results published by the Company 2 Gafisa is well positioned to reap the benefits of the recovery in the residential real estate market in Brazil 3 The suggested removal of Gafisa s board members represents a risk to shareholder value generation as well as a potential risk of discontinuity in Gafisa s strategy 4 Gafisa is exploring potential strategic alternatives to maximize the value to all shareholders 17

18 THE VOTE OF EACH SHAREHOLDER OF GAFISA IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES HELD Further information on the Extraordinary Shareholders Meeting may be obtained in the Investors Relations website ( or please contact us at : +55 (11) or +55 (11)

19 T H A N K YO U ri@gafisa.com.br This presentation contains forward-looking statements which are subject to risks and uncertainties. These statements are based on beliefs and suppositions of our Management and information to which the Company currently has access. Forward-looking statements include information about our intentions, current beliefs or expectations, as well as those of members of the Company s Board of Directors and Board of Executive Officers. The exceptions related to forward-looking statements and information also include information on potential or supposed operating results, as well as statements which are preceded, followed by or including the words believe, may", will, "continue", "expect", foresee", intend", "plan", "estimate" or similar expressions. The forward- looking statements and information are not guarantees of performance. They involve risks, uncertainties and suppositions because they refer to future events, therefore, subject to circumstances which may occur or not. Future results and the creation of value for shareholders may significantly differ from those expressed or suggested by the forward-looking statements. Most of the factors which will determine these results and values go beyond our capacity or ability of control or foresee. 19